Ireland to End State Guarantee to Bank Bondholders

Tuesday, 26 Feb 2013 01:07 PM

 

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The Irish government is ending its guarantee to insure bank bondholders against losses, a move that reflects growing confidence that the country's three main banks can survive on their own.

Ireland's emergency 2008 decision to insure bank bondholders against potential losses failed to shore up confidence in its banks — and ended up bankrupting the nation. But Ireland this year is taking steps to repair its credit rating and exit its own 2010 international bailout.

Tuesday's government decision to end the insurance scheme for foreign investors in Ireland's banks March 28 offers more evidence that the country is getting ready to resume normal debt financing.

Finance Minister Michael Noonan says Bank of Ireland, Allied Irish Banks and Permanent TSB are "normal enough to proceed now without a guarantee."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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